Dive Brief:

SDG&E is the first major utility in California to hit the cap, which limits distributed generation projects eligible for net metering to 5% of a utility's peak demand.

New applications will now be shifted to the new time-of-use rates and fees established in California Public Utilities Commission (CPUC)'s decision earlier this year that outlined the successor tariff for net metering.

Dive Insight:

SDG&E is the first California utility to breach the cap. While such an event typically induces panic in solar advocates (as seen in states like Nevada and Massachusetts), California regulators acted swiftly enough to ensure a plan was in place for when the cap would be hit.

Under CPUC's January decision, new net metering customers will be able to keep retail rate remuneration for energy exported to the grid after the cap is hit, but they will also pay a one-time interconnection fee between $75 and $150, a non-bypassable monthly charge ranging from $0.02/kWh to 0.03/kWh, and will be moved onto time-of-use rates.

The solar industry isn't particularly worried about the impacts of a California utility hitting its net metering cap. Bernedette Del Chiaro, executive director of California Solar Energy Industries Association (CalSEIA), doesn't anticipate any slowdowns in rooftop solar installations in SDG&E's service territory after the cap is hit, according to PV Tech.

"If anything, we anticipate a return to growth as more consumers realize that NEM 2.0 isn’t a threat to the economics of solar and that now is just as good to go solar as ever," she said.

The other two major California utilities, Southern California Edison and Pacific Gas & Electric, aren't far behind SDG&E in reaching their own net metering caps. As of June 19, the last time PG&E's net metering tracker was updated, the utility was about 289 MW away from reaching its 2,409 MW cap. SCE, which hasn't updated its tracker since April, was about 621 MW away from its 2,240 MW cap.